Legendary trader Warren Buffett advises to be fearful when other people are greedy, and be greedy when other folks are fearful. 1 way we can check out to measure the amount of panic in a provided inventory is by way of a technical analysis indicator referred to as the Relative Power Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI looking at falls beneath 30.
In trading on Wednesday, shares of Cathay Normal Bancorp (Image: CATY) entered into oversold territory, hitting an RSI looking at of 29.4, right after altering hands as lower as $38.98 per share. By comparison, the existing RSI reading of the S&P 500 ETF (SPY) is 30.7. A bullish investor could appear at CATY’s 29.4 RSI reading through right now as a indication that the current significant marketing is in the procedure of exhausting by itself, and start to glance for entry stage options on the acquire side. The chart under displays the a single calendar year effectiveness of CATY shares:
Looking at the chart higher than, CATY’s reduced stage in its 52 7 days array is $35.51 for each share, with $48.88 as the 52 7 days high level — that compares with a final trade of $39.25.
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